Each of the states and most territories of the United States and several foreign countries or their sub jurisdictions have enacted or promulgated unclaimed property laws or regulations that proclaim property to be abandoned after a period of dormancy or inactivity by the owner of the property. These laws require the holder of the abandoned or unclaimed property to return the property to its rightful owner or escheat the property to the treasury of the applicable jurisdiction.
As technology advances, new products will give rise to intangible property rights that are subject to escheat. Therefore, the impact of escheat upon new technologies must be evaluated and compliance implemented as required. This impact is substantial with respect to a group of products recently developed by the financial services, retail, and payment instrument industries. These sectors have created payment instruments that use electronic systems or devices to carry out the payment. Examples of the payment systems or devices are magnetic stripe cards, chip based cards, wireless phone chip devices, and the like. Examples of the payment instruments are prepaid cards, stored value cards, gift cards, credit memo accounts or cards, loyalty or affinity points or cards, rebates, promotional cards, awards or incentive points or cards, health savings account cards, government benefit cards, payroll cards, per diem cards, prepaid minutes from wireline or wireless telephone companies, electronic coupons or certifications, mobile chip payment systems, and the like. Each of these products or services (hereinafter “cards” or “card”) creates intangible property rights that may be subject to escheat.
These cards are sold or issued by financial institutions, retailers, third party distributors, and other issuers (hereinafter “issuers” or “issuer”) for use by businesses, consumers, or other end-users. The cards usually are sold in a program or portfolio (hereinafter a “portfolio” or “program”) through which a particular card is designed, marketed, and distributed for use by targeted end-users. An example is an open-loop Visa rebate card issued by a retailer that may be used by a recipient anywhere that accepts Visa. Another example is a closed-loop gift card issued by a retailer that may be used by the gift recipient only at the issuing retailer. A third example is a payroll card sponsored by a bank that may be used like a debit card. In each portfolio, funds are loaded on or remitted to buy the card by the purchaser, the card may be used by an end-user for its designated purpose, and the card is honored by the issuer upon use.
These cards are marketed and used throughout interstate commerce. As a result, they give rise to unclaimed property issues that cut across jurisdictional lines. The cards may be sold by an issuer incorporated in one state with its principal place of business in another state. They may be sold from outlets in multiple states to buyers residing in varying states. The buyers may retain the cards, or gift or give them to recipients or end-users located in varying states. The buyers, recipients, and end-users may use the items in other states. If reloadable, the cards may be reloaded in varying states. These states may shift, from time to time, as the locations of buyers, end-users, or issuers move. Therefore, as the cards become inactive or dormant over time, the cards may become subject to the escheat laws of several different jurisdictions.
Determining which jurisdiction's escheat laws may apply to cards and instruments has substantial economic impact upon the issuers of the items. When a card is not used or redeemed by an owner (sometimes called “breakage”), the issuer holding the obligation to honor the card must determine the escheat status of the item by evaluating the escheat laws of numerous jurisdictions in light of varying applicable factual scenarios. In some jurisdictions, the issuer may be permitted to retain all or a portion of this breakage. In other jurisdictions, a completely different result may apply. Furthermore, the issuer's objectives may vary. Some may wish to minimize escheat, while others may desire to maximize escheat in certain circumstances (for example to take advantage of the statutory release of the issuer's liability to the end-user of an inactive instrument or card).1 1The breakage in a portfolio gives rise to revenue generating opportunities for an issuer. It creates float or cash flow. It may be harvested by fees or expiration dates if permitted by law. And it may be subject to derecognition (described below) with attendant income or earnings. Escheat bars or limits these opportunities in that breakage is remitted to a jurisdiction upon escheat.
Determining which jurisdiction's escheat laws may apply to cards also has substantial impact upon the end-users of the items. When escheat is required and carried out by an issuer, the escheat process likely will be a materially adverse and invasive event for the end-user. Upon escheat, the issuer's obligation to honor the card will be released, and the ability of the end-user to use the card, as intended and expected, will end. The end-user will be required to locate the card where it was escheated, and engage in a cumbersome process of reclaiming the item. These problems are pronounced for many of the card types listed above. The items usually are small dollar items rendering the reclamation unattractive, and the card owners may be anonymous making reclamation difficult to process.2 2Determination of which jurisdiction's escheat laws may apply to a program also may have substantial impact upon the features of a program. Many programs are designed so that the cards do not expire, and an issuer may promote a “no expiration” feature as a favorable attribute of a program. While escheat is not an expiration date, it may have a similar impact upon a card when the card is shut down upon escheat.
The standards applied in unclaimed property laws for cards have a correlation to certain generally accepted accounting principles. The escheat laws of several jurisdictions require intangible property to be escheated when abandoned or unclaimed. Payment cards are items of intangible property that may be subject to such escheat. For the purpose of accounting, the cards consist of an asset on the owner's books and a payable on the issuer's books. Under accounting principles, an issuer may write-off an aging card payable when the likelihood of the card being used becomes “remote.” This practice is known as “derecognizing” the payable, and the corresponding bookkeeping entry usually results in income to the issuer.3 The “remote use” standard used in accounting for derecognizing cards is similar to the “abandoned or unclaimed” standard used under escheat laws. The resultant interplay between the two standards has substantial economic effect. If a “remote use” card is also an “abandoned or unclaimed” card, an issuer may not be able to derecognize the payable. Instead, the issuer may be required to escheat the card to an applicable state. 3As used herein, the phrase “derecognition” refers to the accounting practice of writing-off a liability or payable with the corresponding accounting entry resulting in income.
Determining which jurisdiction's unclaimed property laws may apply, and correctly applying that jurisdiction's laws after such determination, is a difficult task for issuers of cards. The escheat statutes vary from state to state, and country to country, on numerous relevant subjects. The priorities among competing jurisdictions are subject to rules, and these rules themselves vary from state to state. These laws are not static but are amended over time. In addition, the application of the laws is fact dependent and varies upon certain facts, including the type of issuer, type of card, facts specific to a portfolio, facts regarding the owners, and facts specific to a particular card. These facts are not static but change over time. Therefore, it would be beneficial to provide a system, process, and method under which an issuer may process the large numbers of applicable legal and factual escheat variables to determine and manage the escheat of the cards in a portfolio and seamlessly adjust and manage escheat as the laws and facts change over time.4 4A rules-based systems processing platform would preferably determine, on any given date, if the cards are required to escheat. For cards slated to escheat, the systems platform also would track, ascertain, and manage all pertinent escheat events and attributes regarding the cards, including, among others, determination of the jurisdiction of escheat, the presumed abandonment date, the duty to provide a pre-escheat notice, the date for the pre-escheat notice, the date for filing with the jurisdiction, the amount subject to escheat, the statute of limitation for card owner claims, the statute of limitation for escheat jurisdiction claims, and the archive requirements.
The legal and factual variables impacting the escheat status of a card are highly specific to each individual item. For example, the escheat status of cards issued to end-users located in the same state may vary. Similarly, cards issued by issuers located in the same state may vary as to escheat. Even the cards sold in the same state may vary. Furthermore, changes that will impact the escheat status of the cards over time are not uniform to a portfolio or to any particular state. Many changes impacting escheat are specific to a single card. Therefore, it would be beneficial to provide a system, process, and method under which the escheat status, attributes, and events regarding each individual card in a portfolio are processed, determined, and managed on a per-item basis (hereinafter “individually positioned”) and seamlessly processed, reset, and managed over time on a per-item basis as the laws and facts change (hereinafter “individually repositioned”).5 5A rules-based systems processing platform preferably would determine on a per card basis, on any given date, if cards are required to escheat. For cards slated to escheat, the systems platform preferably would track, ascertain, and manage all pertinent escheat events and attributes on a per card basis. As the card ages, the systems platform would adjust the escheat status and management for the card to optimize compliance on a per card basis. The systems platform preferably would track the escheat attributes of the card over time, ascertain applicable escheat events, and manage or direct the management of the card upon the escheat events.
Some issuers elect to design solutions to manage the escheat of cards. Some design the payment instrument itself to minimize or maximize the amount required to escheat. Others reorganize their company structure to minimize or maximize breakage by trying to take advantage of the escheat laws of the issuer's domiciliary state.6 While these types of solutions may benefit an issuer, they typically will use techniques based upon portfolio-wide averaging, coupled with efforts to achieve a desired result on average (i.e., hit the mean) or an outcome that will most often occur (i.e., hit the mode). The use of means or modes to address the interplay of multiple escheat laws with multiple factual scenarios is helpful, but it will not achieve an exact result for the portfolio or the best result for the individual items residing on one side or the other of the targeted mean or mode. And, given the number of escheat variables in question, an escheat solution may have unclear or unintended consequences unless the impact of a solution is determined on a per card basis. 6For example, an issuer may relocate to, or incorporate a subsidiary issuer company in, a jurisdiction that has favorable escheat laws, and issue the cards or instruments from that state. The Supreme Court has recognized that a company may select a state of incorporation by reference to which state's laws are more attractive on the subject of escheat. See, Delaware v. New York, 507 US 490, 507 (1993).
Furthermore, when a card program is designed, several non-escheat related features of the card program will impact the escheat of the cards in the program. Examples of such features are fees, expiration dates, capped loads, pre-activated card amounts, cash back, use of open-loop versus closed-loop systems, the scope of partially open-loop systems, and the like. In addition, the design and selection of certain distribution methods for the cards, such as Internet sales or third party distribution channels, may impact the escheat profile of a portfolio. The current techniques used to assess the impact of features and methods upon escheat typically use techniques based upon portfolio averages and targeted means and modes. The impact of features and methods upon escheat can be more accurately assessed, however, if the impact upon each card is determined on an individual basis. Therefore, it would be beneficial to provide a system, process, and method under which each card in a portfolio is individually positioned with its escheat status, on any given date, to assess the impact of program designs, escheat solutions, program features, and distribution methods upon the escheat of the cards within the portfolio.7 7A rules-based systems processing platform preferably would determine, on any give date, the exact escheat profile of a portfolio by reference to the individual escheat status of each card in the portfolio. The settings for the platform preferably would be subject to adjustment to permit its use to perform “what-if” and other diagnostic runs to determine the escheat impact of various program designs, escheat solutions, program features, or distribution methods.
If a card is not subject to escheat, the payable underlying the card may be subject to derecognition by the issuer with attendant income or earnings. The derecognition of cards is subject to accounting standards under which the cards are derecognized when their likelihood of being used becomes remote. Under current practices, an issuer typically will use an accounting method that derecognizes card payables on a portfolio-wide basis as opposed to a per-item basis. The ability to derecognize payables on a per-item basis may be preferable, however, for a particular portfolio. In addition, when a portfolio-wide method is used, the issuer may desire to reconcile its portfolio-wide method with the individual items in the portfolio. In addition, depending upon the accounting method used to derecognize the payables, an issuer may desire to track, ascertain, and manage derecognition on a per-item basis, so that each card is seamlessly derecognized over time pursuant to a specified accounting method and supporting statistical methodology. Therefore, it would be beneficial to provide a system, process, and method under which each card in a portfolio is individually positioned with respect to derecognition at the time a card is sold and individually repositioned with such status on a seamless per-item basis over time and as the facts change.8 8Various accounting methods are available for derecognizing card payables. Depending upon the method, the amount that may be derecognized, along with the timing of derecognition, likely must be supported by a valid statistical model. A rules-based systems processing platform preferably would apply the accounting method specified by the issuer for derecognition, use the transaction data for the program to statistically support and apply the accounting method, and direct and manage the derecognition of the portfolio on an individual card basis as each card ages.
To properly assess the economic impact of the cards positioned for escheat or derecognition, the number and balances of such items on any given date should be discounted to reflect the impact of redemptions arising from use of the cards by end-users prior to future escheat or derecognition dates. At the time a card is sold, the escheat or derecognition of the card will be future events, and they will remain future events as the card ages until they occur. Therefore, to assess the present economic impact, on any given date, of the future escheat or derecognition of cards, the balances of the cards slated for future escheat or derecognition should be discounted to reflect the likelihood that they will be redeemed before escheat or derecognition occurs. The adjusted balances of the cards after discounting for likely redemptions (hereinafter the “redemption discounted balances”) will provide the issuer, on any given date, with a more accurate economic view of the escheat and derecognition profile of a portfolio. Therefore, it would be beneficial to provide a system, process, and method under which a portfolio, or any segment thereof, will be discounted to reflect the impact of future redemptions upon the items positioned for escheat or derecognition and to provide the redemption discounted balances for the portfolio or any segment thereof.9 9A rules-based systems processing platform preferably would use the transaction data from the program to statistically set redemption factors for the program and use the factors to calculate the redemption discounted values for the portfolio. The redemption discounted balances will provide valuable economic information to an issuer with respect to assessing future breakage income, managing cash flows to meet escheat needs, and in managing revenue generating opportunities concerning breakage.
Furthermore, redemption rates likely will vary among the types of cards comprising a portfolio. Therefore, a determination of the redemption discounted balance of a portfolio, or any segment thereof, will depend upon the nature of the individual cards comprising the portfolio or segment. In turn, the redemption discounted balances of the individual cards within a portfolio or segment likely will depend upon individual characteristics that are specific to each individual card, such as its age, its balance, its issuing sector, and the like. In addition, these individual characteristics for each card will not be static but likely will change over time. For example, a card will have one redemption rate on the date it is sold but a completely different redemption rate four years later. Therefore, it would be beneficial to provide a system, process, and method under which each card within a portfolio is individually positioned with its redemption discounted balance at the time of sale and individually repositioned with its redemption discounted balance on a seamless per-item basis as the card ages and as the facts change over time.10 10A rules-based systems processing platform preferably would use the transaction data to set redemption factors and apply the factors to each card in a portfolio on an individual pre card basis to set the redemption discounted balance of the card on a given date and to adjust the redemption discounted balance of the card as its ages. This method and process enables the redemption discounted balance to be efficiently determined for any segment of a portfolio by reference to the aggregated values of the cards in the segment.
Furthermore, current methods used by an issuer to calculate the redemption rate and the concomitant breakage rate for a portfolio, or any segment thereof, typically require the issuer to conduct a mathematical or statistical analysis of the portfolio or applicable segment to determine its redemption and breakage rates. When a portfolio is administered in an operational setting, however, the portfolio typically will be segmented into subsets for many purposes for analysis or operations. For example, the historical numbers for a portfolio typically will be separated and presented by year, such as by cards sold in particular years. They also may be separated by geographic location, such as by state. They also may be segmented by distribution method, such as Internet versus brick-and-mortar. They typically will be separated by combinations of the above along with other characteristics or factors. In addition, the splitting of a portfolio by an issuer into subsets for analysis or operations typically will reoccur over time. For example, the numbers for a portfolio may be separated into subsets and presented in regular monthly, quarterly, or yearly statements or reports. Or the splitting of a portfolio into subsets may be required for a special project as of a specified date.
The current practice of determining redemption and breakage rates by performing a mathematical or statistical analysis of a portfolio, or a specified segment thereof, is not practical for payment cards under these circumstances. A system, however, that individually positions each card with its individual redemption rate, breakage rate, and redemption discounted balance and then aggregates the individual rates and balances for specified subsets of a portfolio would enable the redemption rate, breakage rate and redemption discounted balance for any specified subset of a portfolio to be determined and reported on an efficient basis without resort to multiple or repeated mathematical or statistical analyses. This “bottom-up” system would permit redemption and breakage rates, along with discounted redemption balances, to be reported for multiple specified subsets of cards within a portfolio as of any given date.11 For example, the breakage rate and redemption discounted balance of the cards sold in 2003 could be determined as of any given date. As another example, the breakage rate and redemption discounted balances of the group of cards required to be escheated to Missouri in 2014 could be determined. Therefore, it would be beneficial to provide a system, process, and method under which the redemption rates and redemption discounted balances of the cards in a portfolio are individually determined and then aggregated by reference to specified segments of a card portfolio. 11The process and method preferably would determine the redemption rate and breakage rate from the data for a portfolio as a whole, and then individually position each card with its specific redemption rate and breakage rate and adjust those rates for each specific card over time. When the redemption discounted balance is required for any subset or segment of a portfolio, the individual rates for the cards in the subset or segment are aggregated and reported. This bottom up approach is more efficient than the current practice of statistically or mathematically analyzing each subset of a portfolio. It also provides a more statistically sound approach to setting breakage rates and redemption discounted balances of small segments or subsets of a portfolio.
The determination and positioning of the escheat status, derecognition status, redemption rate, breakage rate, and redemption discounted balance for the individual cards in a portfolio will have a substantial economic impact upon the portfolio. As a result, these metrics should be determined on a real-time or near real-time basis at or about the time when the items are sold and should be individually repositioned on a real-time or near real-time basis over time at or about the time when facts and laws change. Therefore, it would be beneficial to provide a system, process, and method under which the escheat status and derecognition status, along with the redemption discounted values, of the cards in a portfolio are individually positioned and individually repositioned on a real-time or near real-time basis.12 12A rules-based systems processing platform preferably would aggregate and filter applicable transaction data on a real-time or near real-time basis specified by an issuer, and would set and reset the escheat and derecognition status and redemption adjusted balance of each card on an individual basis as the card ages.
The current models for issuing payment instruments should be classified as “single footprint systems” because they are capable of using only one issuer for each portfolio thereby confining the issuer and end-users to the positives of a single issuer state's laws while also exposing the issuers and end-users to the negatives of that state's laws. This limitation could be managed if the cards in the portfolio are seamlessly issued by multiple companies domiciled in multiple states (hereinafter the “multiple footprint system”).13 A multiple footprint system would allow the flexible use of differing combinations of multiple companies to issue cards within a single portfolio. Combinations would include a parent and subsidiary, multiple subsidiaries, one or more independent companies, and the like. Therefore, it would be beneficial to provide a system, process, and method under which a multiple footprint system may be used to issue the cards of a single portfolio. 13As one of many legal variables affecting escheat, the unclaimed property laws of the domiciliary state of the card issuer, in certain circumstances, may govern and impact the escheat of the cards. Each card issuer will have one domicile located in a single state. Therefore, the use of a single footprint system restricts the management of this legal variable to one issuing state's laws. In a single footprint system, there will be only one issuing state, one domicile for that state, and, thus, only one applicable issuing state's laws. A multiple footprint system uses more than one issuer to issue the cards of a portfolio. Therefore, a portfolio manager may take advantage of more than one set of issuing states' unclaimed property laws.
Furthermore, an issuer may desire to retain one segment of a portfolio while selling or transferring another segment of the same portfolio to one or more other issuers. Transfers of a segment of a portfolio among multiple issuers are difficult, if not impossible, to implement in a single footprint system because the cards cannot be readily repositioned for issuance by multiple issuers. The splitting of a portfolio, however, among one or more issuers (hereinafter “split issuance”) will be possible, however, in a multiple footprint system. Therefore, it would be beneficial to provide a system, process, and method under which the cards in a portfolio will be processed and subject to split issuance by multiple issuers in a multiple footprint system.
Furthermore, the multiple issuers in a split issuance system may desire to split the cards among the issuers based upon the escheat status or derecognition status of the cards in the portfolio, so that cards with a specified status are issued by one issuer and the cards with another status are issued by the other issuer. The issuers may desire to implement these splits at regular intervals or on designated timetables as the cards and instruments are sold to buyers or age over time. This method also would enable an issuer to classify the cards in a program by reference to the quality of their escheat status or derecognition status so that an issuer may retain one or more classes of cards while selling or transferring other classes of cards for issuance by another issuer. Therefore, it would be beneficial to provide a system, process, and method under which the cards in a portfolio will be classified on an individual per card basis by reference to the escheat status or derecognition status of the cards and allocated by class among multiple issuers in a split issuance system at designated intervals or at specified times.
Furthermore, when a multiple footprint system is used for a portfolio, each card in the portfolio must be placed in the correct footprint at the correct time so that it is issued by the correct issuer of the proper footprint at the desired time. In addition, the class or status of a card may change over time or upon changes in law or facts, and an issuer may desire to reposition a card among the footprints of the multiple footprint system to reflect the change. Therefore, it would be beneficial to provide a system, process, and method under which the individual positioning method is used to individually position and populate each individual card with the proper issuer and footprint of a multiple footprint system and to individually reposition each card among the multiple footprints and issuers on a seamless basis as the card ages or the laws and facts change over time.14 14With respect to multiple footprint systems, a rules-based systems processing platform preferably would determine the status of each individual card and would allocate and populate the footprints of the multiple footprint system. In its diagnostic mode, the systems platform preferably would determine the impact of various combinations of footprints upon the escheat and derecognition profiles of a portfolio. In its operation mode, it preferably would triage the cards as sold and allocate and populate each footprint with a correct and optimized set of cards. In its classification mode, it preferably would classify the cards in a portfolio by specified escheat status or derecognition status and split the portfolio pursuant into the specified classes.
Furthermore, when a multiple footprint model is used, an issuer may desire to individually position the cards into the footprints on a real-time or near real-time basis at specified times which may be the dates the cards are sold to buyers or other dates when the portfolio is transferred or split. Real-time or near real-time positioning in multiple footprint systems assures that each issuer in each footprint will be the holder of the card obligation from and after the specified time. It also helps in managing escheat issues arising from delayed positioning. Additionally, it assures that the cards specified for the multiple footprints are accurately and timely allocated among the footprints. Therefore, it would be beneficial to provide a system, process, and method that individually positions cards among the multiple issuers of a multiple footprint system on a real-time or near real-time basis when and as the products are sold to buyers or at other specified times.15 15The systems platform preferably would manage the multiple footprint system in real-time or near real-time at or about the time cards are sold or used, would reposition and reclassify the cards as they age over time, and would reallocate and populate the footprints of the multiple footprint systems upon repositioning.
Furthermore, the approaches taken by issuers to escheat compliance are not uniform but differ from issuer to issuer. The current methods used by issuers to assess the risk of their decisions concerning escheat compliance typically use estimates based upon portfolio averages, means and modes. In addition, many issuers require their outside law firms or accounting firms to provide opinion letters supporting the issuers' methods for handling the escheat and derecognition of cards. The current methods used to provide opinion letters typically use estimates based upon portfolio averages, means and modes. An assessment of the compliance related risks arising from an issuer's compliance decisions will be made more efficient and accurate if a portfolio can segmented into subsets for the purpose of isolating the risk of a particular decision on an exact or near-exact basis by individually positioning the cards with the subset by each card's escheat status. Similarly, the process of seeking and providing opinion letters would be made more efficient and accurate. Therefore, it would be beneficial to provide a system, process, and method under which the cards in a portfolio are individually positioned by their escheat status into specified subsets for the purpose of risk assessment and opinion letters.
Furthermore, when a multiple footprint system is used, the cards in a portfolio will be issued by multiple issuers. The buyers or other end-users of these cards may desire, from time to time, to ascertain the identity of the issuer of a particular item. Therefore, it would be beneficial to provide a system, process, and method under which a buyer or end-user may be able to ascertain the identity of the issuer of a particular card owned by the buyer or end-user.
The escheat of cards will materially alter the usual course of conduct of the issuer and end-user regarding the use of the items. Ordinarily, when an item is used by an end-user, the end-user will present the item for redemption to an entity such as a retailer. If properly presented, the card will be authorized for acceptance by the retailer and honored by the issuer through a settlement payment process. Transaction processors electronically activate cards when sold, authorize cards for use at retailers when presented for redemption, and settle the payment by the issuer to the retailer after a card is redeemed. When the item is escheated, however, this orderly process will cease. The issuer will be required to escheat the card to an applicable jurisdiction. At that time, the issuer's obligation to honor the card will be released. The ability of an end-user to use the card will cease and will be declined upon presentation, leaving the end-user to locate and reclaim the card from the state of escheat.
The current system of reclaiming escheated cards is burdensome and is not cost effective for low dollar value or anonymous cards. Therefore, it would be beneficial to provide an automated system, process, and method under which an issuer may seamlessly honor an escheated card upon presentment by an end-user and seek reimbursement from the state regarding the escheated item. In the alternative, it would be beneficial to provide an automated system, process, and method under which the data for the escheated cards are managed for the jurisdictions for efficient processing of reclamation in a manner consistent with the current transaction processing systems used to process the cards prior to escheat.
When cards are escheated, the issuer is required to file a report with the jurisdiction of escheat and likely will be required to transmit certain information and data concerning the escheated cards to the jurisdiction of escheat. With respect to some filings, an issuer will be required to provide specific data on the cards escheated to the jurisdiction. Other filings, however, will be made in the “aggregate” without supplying specific data for the escheated cards. When the information is escheated in the aggregate, the jurisdiction will not have sufficient information to process a reclamation claim. Furthermore, for security purposes, certain issuers may desire not to transmit card numbers and other security sensitive information to the state upon escheat. Therefore, it would be beneficial to provide a system, process, and method under which information retained by the issuer upon escheat, including the information retained for security reasons and data retained with respect to aggregated filings, may be accessed by the state or card owner for the purpose of processing of a claim made by a card owner with the escheat jurisdiction for return of an escheated card.
As the cards are purchased and used by end-users, the resultant card transactions likely will be electronically processed by a transaction processor. The transaction processor may be the issuer but likely will be a third party processor. The transaction processor's data likely will be considered the “data of record” for a program or portfolio. This transaction data, along with other information from the issuers, will be required to perform the various processes, systems and methods described herein. In addition, it is desirable that the issuer's accounting books regarding escheat and derecognition transactions tie to the transaction processor's data of record.16 Therefore, it would be beneficial to provide a system, process, and method under which the transaction data and other pertinent information is aggregated through one or more gateways from multiple sources, including issuers and transaction processors, for the performance of the processes and methods described herein and for the purpose of enabling an issuer to tie its accounting books with the transaction processor's data of record with respect to escheat and derecognition related transactions. 16With respect to derecognition of cards, under current practices, the transaction processor's “data of record” cannot record the derecognition of a card, because the card must remain live on the processor's records in the event it is used after derecognition. Similarly, if an issuer desires to honor an escheated card when used after escheat, the escheated card must remain live on the processor's data of record. It would be desirable to enable an issuer to reconcile and tie the transaction processors data of record for a program with the issuer's books with respect to escheat and derecognition transactions.
Given the nature of the card programs and portfolios, the issuers likely will sell and issue millions of small dollar items for use by millions of customers throughout a wide variety of jurisdictions resulting in the creation, maintenance, and processing of millions of small dollar payables with varying escheat characteristics, derecognition attributes, breakage rates, and redemption discounted values, all of which may change over time. The proper and timely processing of such large volumes of items, transactions, and variables would be benefited by an automated process. Therefore, it would be beneficial to provide a system, process, and method under which the various processes, systems and methods described herein are implemented on an automated basis across multi jurisdiction portfolios with large numbers of accounts.